By: E&P Staff
The guilty pleas are adding up in the ongoing federal investigation of the circulation scandals at Tribune Co.’s Newsday and its Spanish-language daily Hoy.
Since March 31, when Louis Sito came out of seclusion and pleaded guilty to charges of mail fraud, there have also been guilty pleas by a former Newsday circulation consultant and a Spanish-language publication distributor hired as Hoy planned to grow into a national daily. Sito was publisher of Hoy, senior vice president of Newsday and the first Tribune Co. vice president for Hispanic Media when he “retired” amid the first reports of circulation overstatements that fraudulently reported Newsday circulation as 100,000 copies higher than actual sales, and that nearly doubled Hoy’s actual circulation.
The little-noticed guilty pleas were first reported late last week by Newsday in stories by staff writers Robert E. Kessler and James T. Madore.
Newsday reported that the same day Sito pleaded guilty at U.S. District Court in Brooklyn — with authorities changing the courtroom for his arraignment in an apparent attempt to elude Newsday reporters — Gustavo Acosta pleaded guilty to similar mail fraud charges.
Acosta runs Acosta News, a Hackensack, N.J.-based distributor of Spanish-language periodicals with subsidiaries in the Midwest and California, where Hoy has editions in Chicago and Los Angeles. Citing unnamed sources, Newsday reported Sito and Acosta are cooperating with the federal investigation into the circulation scandals. “The two admitted working together mainly to inflate the circulation of Hoy, according to the sources,” Newsday reported.
Newsday said Sito had been “instrumental in hiring Acosta’s firm to distribute Hoy in Chicago and Los Angeles, on the grounds that Tribune did not have the knowledge or experience to sell papers effectively in the Hispanic market,” but that Tribune Co. had been reducing its relationship with Acosta since the scandal, and severed ties at the end of 2005.
In a third plea, reported Saturday by Newsday, Edward Smith pleaded guilty to a single count of mail fraud. Smith is a former Newsday employee hired after retirement as a consultant in 2002 to work with Audit Bureau of Circulations (ABC) auditors who annually reviewed Newsday and Hoy circulation figures. In an indictment last summer, Smith was charged with deceiving ABC by faking sales of street hawkers, who were credited with selling thousands of copies that were actually thrown away.
Newsday noted in a written statement that it terminated its relationship with Smith in 2004 when its internal investigation uncovered irregularities. ABC said it could not comment.